Recently, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation issued the “Announcement on the Collection of Consumption Tax on Electronic Cigarettes” (hereinafter referred to as the “Announcement”), which included electronic cigarettes in the scope of consumption tax collection. The tax rate for the link is 11%, which will be implemented from November 1, 2022.
The “Announcement” clarifies that taxpayers who produce and wholesale electronic cigarettes shall pay taxes according to the sales of production and wholesale electronic cigarettes.
Taxpayers who sell electronic cigarettes through agency sales in the production process of electronic cigarettes shall pay taxes based on the sales of distributors (agents) to electronic cigarette wholesale enterprises. Taxpayers who import electronic cigarettes shall pay taxes according to the component taxable price. Taxpayers engaged in electronic cigarette processing business in the production link of electronic cigarettes shall separately calculate the sales of electronic cigarettes holding trademarks and the sales of OEM electronic cigarettes; if they are not accounted for separately, they shall pay consumption tax together.
According to the “Announcement”, electronic cigarettes refer to electronic transmission systems used to generate aerosols for people to smoke, including pods, smoking sets, and electronic cigarette products sold in combination with pods and smoking sets.
Cartridges refer to electronic cigarette components that contain atomized substances. Smoking equipment refers to electronic devices that atomize atomized substances into inhalable aerosols. Units and individuals that produce (import) and wholesale electronic cigarettes within the territory of the People’s Republic of China are taxpayers of consumption tax. Taxpayers in the production of electronic cigarettes refer to enterprises that have obtained the license of tobacco monopoly production enterprises and obtained or licensed to use the registered trademarks (hereinafter referred to as the trademarks) of other people’s electronic cigarette products. If electronic cigarettes are produced through OEM, the enterprise holding the trademark shall pay the consumption tax. The taxpayer of electronic cigarette wholesale refers to the enterprise that has obtained the license of tobacco monopoly wholesale enterprise and operates the wholesale business of electronic cigarette. Taxpayers in the import of electronic cigarettes refer to units and individuals who import electronic cigarettes.
Regarding import and export policies, the “Announcement” clarifies that the export tax refund (exemption) policy applies to taxpayers exporting e-cigarettes; e-cigarettes are added to the list of non-tax-exempt goods imported from border residents and are taxed according to regulations; in addition to the above provisions, individuals The consumption tax collection of imported electronic cigarettes by carrying or sending them shall be implemented in accordance with the relevant regulations of the State Council.
Post time: Oct-31-2022
